"Should couples combine finances or keep personal accounts?"

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
PeninsulaPerson
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Re: "Should couples combine finances or keep personal accounts?"

Post by PeninsulaPerson »

UpperNwGuy wrote: Mon May 29, 2023 10:33 pm I think the best of both worlds is to have three accounts: his, hers, and ours.

+1
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MrBobcat
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Re: "Should couples combine finances or keep personal accounts?"

Post by MrBobcat »

barberakb wrote: Tue May 30, 2023 6:15 pm there is no wrong answer...

Do what works best for you in YOUR relationship. Everyone is different.
Exactly.
fyre4ce
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Re: "Should couples combine finances or keep personal accounts?"

Post by fyre4ce »

My spouse and I are mostly joint. When we got married (~5 years ago) we set up three accounts - a joint checking and two individual checking accounts. Most of our income and all bills go into/out of the joint account. We direct something like $500/month from our direct deposits into our respective individual checking accounts. Initially, this was so we each felt like we had our own money that could be spent without the other spouse's permission. It also seemed prudent to each have an individually-titled account in case, say, the marriage went south and we wanted an account the other spouse didn't have access to.

Five years later, the individual accounts have been of limited value. We tend to keep about $10,000 each in there, transferring money out when the balance much exceeds that. It wasn't a big deal when interest rates were low, but with them higher I'm rethinking whether it makes sense to keep them. I asked my spouse a year or two ago if she'd be OK closing her personal account and she said no, she prefers to keep it, which was fine with me - the opportunity cost is tiny if it makes her feel better. I considered closing mine, but it's at a different bank (brick-and-mortar; our joint checking is online-only) and I've found it convenient to be able to deposit physical cash, sometimes my personal account has features (eg. Zelle) that the joint one didn't have. So we still have the three.

We manage our money as one big pot, both from an income/expense perspective, and investments. I have a spreadsheet where I allocate assets across all our accounts. So for practical purposes we are really joint. I can't imagine an arrangement where one spouse hid assets, has statements sent to their work, etc. We live in a community property state so all marital assets are legally 50/50 owned. (We have a few individual assets that are kept separately in appropriately-titled accounts.) A spouse hiding assets would be like Fidelity refusing to show me statements and saying, "When you're retired and need money for food, let me know and I'll send you some." :confused But, as I've gotten older I've realized that relationships come in all shapes and sizes. As long as an arrangement is working for both people, it's probably okay. If it's only working for one spouse though, then the issue needs to be addressed, or the unhappy spouse needs to be willing to continue being unhappy.
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celia
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Re: "Should couples combine finances or keep personal accounts?"

Post by celia »

Some people are just not good with record keeping. They may:
* forget to record checks that were written or save receipts :oops:
* they may transpose numbers frequently in the checkbook register :oops: :oops:
* they may lose a checkbook or their credit cards frequently :oops: :oops: :oops:

These cases have to figure out what works for them, such as the organized person being in charge of the family money and the disorganized one (or both spouses) having separate accounts for their discretionary money that they can spend how they like.



We are grantors and trustees of several trusts. Some trusts are joint and some are separate so that we can keep separate and maintain our own inheritances. Part of that is that we want different beneficiaries, like relatives on the side of the family we inherited from. I have already gifted part of my inheritance to a needy relative and my spouse didn’t care or have a say in it although he was informed of it. We each also have interests that the other spouse doesn’t share so we are able to spend our separate money on that. It keeps unnecessary arguments away when one person wants an “adventure vacation” and the other wants to work on a hobby.
Dottie57
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Re: "Should couples combine finances or keep personal accounts?"

Post by Dottie57 »

rob wrote: Mon May 29, 2023 7:39 pm Combined... I might be old but I just don't understand splitting and trying to allocate expenses... Makes no sense to me...
I think arguments start because of criticism of purchases on non essentials. If both spouses work it seems like both should be able to make *some* purchases which the other might not approve.
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goingup
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Re: "Should couples combine finances or keep personal accounts?"

Post by goingup »

dagsboro wrote: Tue May 30, 2023 4:16 pm There should be no hard and fast and immutable rules in 2023. No cookbook. No algorithm. It depends on the couple. It depends on the situation. It depends on the generation. It depends on the knowledge. It depends on the income. It depends on emotional intelligence. It depends.
Great response!
bluebolt
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Re: "Should couples combine finances or keep personal accounts?"

Post by bluebolt »

One of the other benefits of separate accounts -
It would personally drive me crazy to see transactions in my account that I didn't make. I know all the transactions I made, DW knows all the ones she made and we don't have to worry about what the other is doing. We trust each other completely and pay ourselves first, so awareness of what the other is spending money on is just some more complexity we don't have to deal with.

Like others in this thread, not saying this is the right way for everyone, but it works best for us:
1. We pay ourselves first
2. We never worry about what the other person spends because, see #1 above
3. Our spending priorities aren't exactly the same, but because of #1 and #2 it never causes any issues
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celia
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Re: "Should couples combine finances or keep personal accounts?"

Post by celia »

fyre4ce wrote: Tue May 30, 2023 6:45 pm Five years later, the individual accounts have been of limited value. . .
I asked my spouse a year or two ago if she'd be OK closing her personal account and she said no, she prefers to keep it, which was fine with me - the opportunity cost is tiny if it makes her feel better. I considered closing mine, but it's at a different bank (brick-and-mortar; our joint checking is online-only) and I've found it convenient to be able to deposit physical cash, sometimes my personal account has features (eg. Zelle) that the joint one didn't have. So we still have the three.
It’s also good to have a separate account at different banks in case one bank freezes your account, you get scammed, or one of you dies. The survivor (or one of you) can still eat and pay bills while the other account(s) are being straightened out.
hppycamper
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Re: "Should couples combine finances or keep personal accounts?"

Post by hppycamper »

Agree with many of the replies, it depends.

For us, we combine our accounts unless they are required to be separate, such as 401Ks, IRAs, I-Bond accounts. We definitely manage all of our accounts as one unit. Because we're both frugal and have similar risk tolerance, this works for us.

So over the years, our focus became making the unit simple to manage and making sure both of us are familiar with managing it. All of our re-occurring bills are on auto pay. We discuss and agree on big decisions first. We take turns doing the book keeping and filing taxes, switching off every year or two. This way, if anything happens to one of us, the other one can pick it up easily.

For non financial stuff, our default is the one with a higher expectation of the task does it :-P
Johnny Thinwallet
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Re: "Should couples combine finances or keep personal accounts?"

Post by Johnny Thinwallet »

pizzy wrote: Tue May 30, 2023 3:30 pm
Johnny Thinwallet wrote: Tue May 30, 2023 2:32 pm
That said, we do each have our own fun/personal individual savings accounts and $100 each pay period goes into these accounts for each of us. We each have 24 pays annually so that's $2,400 per year into each individual account. Personal fun expenses are then pulled from those accounts.
For those of you that do this (I like the idea), how do you spend from these accounts? Debit card? Cash?
We track ALL of our expenses in a spreadsheet and then bucket categories (i.e. mortgage, groceries, etc.). Two of the categories are the fun/personal expenses (one for me, one for spouse). We do our banking updates essentially twice each month when we get paid and fortunately we get paid on the same day. Two paychecks deposited into checking ... then funds are sent to various directions (i.e. x goes to IRAs, y goes to joint taxable, z goes to 529, leftover amount stays in checking to pay bills, etc.).

For the individual accounts, since we track expenses I simply reconcile what has been spent from the fun/personal expense category since the previous pay day to calculate what goes in/out of the individual accounts (with a max deposit of $100 per pay if nothing was spent).

It probably sounds tedious reading it, and for most people this would be. I like control and precision over our personal finance so this works for us, though I'll be the first to admit our plan won't work for people who are more hands off and don't like getting into the weeds. The key, though is for people to figure out what works for them and then putting that plan into action to make sure they stay disciplined and on course.
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snackdog
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Re: "Should couples combine finances or keep personal accounts?"

Post by snackdog »

Separate finances is easier for quasi-separate lives, especially if you don't live together, are not married and/or want to make it easily to split up should the need arise.
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IowaFarmWife
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Re: "Should couples combine finances or keep personal accounts?"

Post by IowaFarmWife »

AlohaBill wrote: Tue May 30, 2023 11:14 am On our wedding day night at a hotel near Honolulu’s airport, I took off my pants and offered them to my bride. I told her in no uncertain terms that I wanted nothing to do with everyday monetary affairs. She grabbed said pants (never giving them back) and said she wanted me to drive her everywhere. Since then she keeps the checkbook, pays the bills (I plug in the numbers on the computer) and says “no” to most of my ideas that involve spending her PRECIOUS money. I have driven her in Japan, Hawaii, Saudi Arabia and California. One of the reasons I assented to cardiac surgery was she said I still needed to drive her around. 8-)
Oh my goodness, I LOVE this story! :)
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tetractys
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Re: "Should couples combine finances or keep personal accounts?"

Post by tetractys »

Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
AGREE! We have a joint house account to pay mortgage, bills, and whatever costs we want to share equally, split 50/50. We keep all other accounts individual, and it works well.
MrTom
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Re: "Should couples combine finances or keep personal accounts?"

Post by MrTom »

We combined everything once we got married. I manage all the finances. We both pay for just about everything with credit cards and they get paid off at the end of each month and the points help fund our love of travel. All our accounts are plugged into Mint, so whenever DW wants she can login and get the overall picture of where we are.

Other than spot checking for anything out of the ordinary in the transaction history, neither of us ever questions what the other buys. We both have similar frugal mindsets so it's never been a concern. If anything we have each at times tried to convince the other to not feel bad about spending on something we want. Anything very large we'd typically consult each other on, but it's hard to think of a situation where we wouldn't have already been discussing something that large for a while.

But to each their own. We have friends who keep everything separate and others who combine.
hachiko
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Re: "Should couples combine finances or keep personal accounts?"

Post by hachiko »

Combined finances is not the opposite of personal accounts. My wife and I have combined finances, for the most part, but we have and primarily use our own separate accounts and only use our one joint checking account for truly joint bills, such as the mortgage, and sometimes for house projects where the contractor only accepts zelle or venmo.

Our investments are in an LLC that is ultimately jointly owned.

Keeping lots of money in a joint savings or checking account introduces a lot of risk (of course, depends on your risk profile). For us, it makes no sense to hold money in joint accounts. We're both lawyers and money is not emotional for us. For some, that risk is either low enough or the benefit is high enough (e.g., a non-working spouse) that using joint accounts may be better.
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Angel of Empire
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Re: "Should couples combine finances or keep personal accounts?"

Post by Angel of Empire »

We combined before we were married. We are a team.

I'll bet the divorce rate is much higher for couples that tried to keep things separate.
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Harry Livermore
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Re: "Should couples combine finances or keep personal accounts?"

Post by Harry Livermore »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
I made (+/-) 4x what my spouse made for many years running. I did the majority of heavy lifting on big-ticket items: mortgage (s, two when we had our rental house), insurance package, property taxes, federal tax owed (usually a result of my self-employment), majority monthly spending on AMEX, and a gaggle of nuisance bills (cable/ internet/ phone, cell phone, utilities) All paid from my personal checking account. She concentrated on kid stuff: day care, camp, school activities. All paid for from her personal checking account. She also kept a vacation fund and a kitchen-redo fund (still pending) Currently (permanently?) my business is down, and we bring in a similar amount. I still "take care" of "my" items, but I've been making up the difference by using cash savings... with her approval and knowledge each time.
Our joint checking gets used mostly for health-care related bills, college payments, and big-ticket home improvement items. We have been married for 26 years and are only up to check 807 on the joint account (I'm up to 9097 on my personal account)
She is very easygoing; I have a more serious demeanor and see everything as high-stakes. But neither of us are spendthrifts, and we talk openly about many relationship issues including money. There are quick monthly reviews (30,000' overview) and an annual, dreaded, budget meeting. It has been, at times, difficult... but often just fine. We laugh a lot. Sometimes I pout. Then I remember it's just money.
I don't think either one of us has ever said, "hey- you make 9/16ths the income but I noticed you are consistently only spending 1/2 of total household income. Where is the other 1/16???"
Cheers
fourwheelcycle
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Re: "Should couples combine finances or keep personal accounts?"

Post by fourwheelcycle »

My wife and I started out as impoverished grad students, fortunately on full scholarships, with only a few thousand dollars between us. When we got married, we opened a joint banking account and we have held our non-retirement savings jointly for forty-eight years. When we were both working, I made about a third more than my wife, but we considered every dollar to be a joint dollar. About the time I retired, at 60, my wife got a big raise, and continued working until 71! Over her career, she made about the same total income as me.

Our grown children and their spouses have each kept separate savings accounts. One family pays into a joint checking account for routine living expenses. The other family has agreed on a pattern where each spouse pays for different expenses - one pays for groceries and utilities, another pays for day care, mortgage, cars, and furniture, etc.
alexbogle
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Re: "Should couples combine finances or keep personal accounts?"

Post by alexbogle »

Harry Livermore wrote: Wed May 31, 2023 6:17 am
alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
I made (+/-) 4x what my spouse made for many years running. I did the majority of heavy lifting on big-ticket items: mortgage (s, two when we had our rental house), insurance package, property taxes, federal tax owed (usually a result of my self-employment), majority monthly spending on AMEX, and a gaggle of nuisance bills (cable/ internet/ phone, cell phone, utilities) All paid from my personal checking account. She concentrated on kid stuff: day care, camp, school activities. All paid for from her personal checking account. She also kept a vacation fund and a kitchen-redo fund (still pending) Currently (permanently?) my business is down, and we bring in a similar amount. I still "take care" of "my" items, but I've been making up the difference by using cash savings... with her approval and knowledge each time.
Our joint checking gets used mostly for health-care related bills, college payments, and big-ticket home improvement items. We have been married for 26 years and are only up to check 807 on the joint account (I'm up to 9097 on my personal account)
She is very easygoing; I have a more serious demeanor and see everything as high-stakes. But neither of us are spendthrifts, and we talk openly about many relationship issues including money. There are quick monthly reviews (30,000' overview) and an annual, dreaded, budget meeting. It has been, at times, difficult... but often just fine. We laugh a lot. Sometimes I pout. Then I remember it's just money.
I don't think either one of us has ever said, "hey- you make 9/16ths the income but I noticed you are consistently only spending 1/2 of total household income. Where is the other 1/16???"
Cheers
Thanks for this and to others who responded to my inquiry. Good insights from others' perspectives.
"Learn every day, but especially from the experiences of others. It’s cheaper!” -- Jack Bogle
SubPar
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Re: "Should couples combine finances or keep personal accounts?"

Post by SubPar »

Primarily combined here. We're close to equal contributors from a salary perspective (45%/55%), which is helpful in our instance.

All direct deposits go to joint checking for household expenses/joint credit cards. From joint checking, we each sweep an equal monthly allowance for personal expenses and we each maintain a personal credit card that's paid from our personal checking accounts. Neither spouse has any say in how the other spends personal monies.

We each max applicable tax-advantaged accounts annually. Surplus funds are held in either a joint savings account, or our joint tenancy taxable brokerage.

It works for us. We are partners with shared goals. While we don't generally discuss financial specifics with our friends/family, I do know that we're an outlier in this regard. Of our closest five [married couple] friends, as well as three [married couple] siblings, we're the only that has joint accounts to my knowledge.
Northster
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Re: "Should couples combine finances or keep personal accounts?"

Post by Northster »

Sort of a hybrid here I suppose. We have a joint checking account, though in practice she manages it, and I have my own. It always seemed awkward to me to have a single account when you buy things like gifts from it. We each have our own credit cards. Monthly deposits from SS and RMDs are split between checking accounts. She pays utilities, I pay groceries, media, and insurance and manage taxes. Investments are unified, though I manage them. Certainly major expenses like cars and vacations are joint decisions. Sort of ad hoc, but works for us. It does help that we have enough resources that we do not need to tightly budget everything.
Jags4186
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Re: "Should couples combine finances or keep personal accounts?"

Post by Jags4186 »

For married couples, unless some oddity is there like 1 person having extreme wealth prior to marriage or this being a second marriage with children from another, I don’t understand not having joined accounts.

I’m unsure how having separate accounts helps if one is a spender and one is saver. What happens when the saver asks the spender for money that they spent on whatever? If the saver is giving the spender an allowance I don’t think that is a healthy situation either.

Obviously though, Taylor and his wife have managed to make it work for 62 years…so what do I know.
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Doom&Gloom
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Re: "Should couples combine finances or keep personal accounts?"

Post by Doom&Gloom »

alfaspider wrote: Mon May 29, 2023 7:44 pm The problem with "separate" finances is you can't truly separate them. What your spouse does with their money impacts you regardless of whether it's kept in a separate account or not.
It does and it doesn't.

Without separate finances and accounts we would have been divorced years ago. Had our finances been combined, free-spending DW would have spent all that she could access to zero or beyond. I would have been exceedingly stressed as that happened. Something would have had to give. We are certainly not typical of most here (or anywhere else probably) in that DW's retirement is heavily anchored by a pension that includes a COLA; mine is based upon IRAs. Having separate finances has worked extremely well for us for years.

However, we have recently confirmed what I have suspected for a long time: our emergency fund is ultimately what my emergency fund is as she has no savings at all. In prior years when we had to fund an emergency, I dug into mine and DW refunded me her share of those expenses as she could. Not ideal, but it worked. We have recently hit an emergency that she will likely not have the ability to chip in her share. I don't mind that for this particular emergency, and it has always been a possibility that I was aware of so it is easy to accept.

Neither of us have any regrets about having had separate finances. In fact, when DW's best friend was getting remarried several years ago, DW advised her to seriously consider having separate finances.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Dottie57 »

IowaFarmWife wrote: Tue May 30, 2023 8:54 pm
AlohaBill wrote: Tue May 30, 2023 11:14 am On our wedding day night at a hotel near Honolulu’s airport, I took off my pants and offered them to my bride. I told her in no uncertain terms that I wanted nothing to do with everyday monetary affairs. She grabbed said pants (never giving them back) and said she wanted me to drive her everywhere. Since then she keeps the checkbook, pays the bills (I plug in the numbers on the computer) and says “no” to most of my ideas that involve spending her PRECIOUS money. I have driven her in Japan, Hawaii, Saudi Arabia and California. One of the reasons I assented to cardiac surgery was she said I still needed to drive her around. 8-)
Oh my goodness, I LOVE this story! :)
I do too!
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climber2020
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Re: "Should couples combine finances or keep personal accounts?"

Post by climber2020 »

Every situation is different; discuss with your significant other and decide which approach is best for you.

Anyone with strong opinions one way or the other making blanket statements they feel should apply to everyone is a bigot.
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Re: "Should couples combine finances or keep personal accounts?"

Post by 6bquick »

pizzy wrote: Tue May 30, 2023 3:30 pm
Johnny Thinwallet wrote: Tue May 30, 2023 2:32 pm
That said, we do each have our own fun/personal individual savings accounts and $100 each pay period goes into these accounts for each of us. We each have 24 pays annually so that's $2,400 per year into each individual account. Personal fun expenses are then pulled from those accounts.
For those of you that do this (I like the idea), how do you spend from these accounts? Debit card? Cash?
yep. debit cards and cash. all of our spendable income gets deposited into joint checking #1. we both have separate checking accounts at another institution (don't routinely have enough in them to avoid fees at primary institution). Wife always wants her money sent to 'fun' checking, sometimes I do, often I just hit the atm.

Seeing as how I control 100% of our finances due to extreme apathy on her part, I can see how this is may be construed as a heavy-handed "allowance" for my wife. However, 1. I live by the same rules. 2. She has no problem with it. 3. it really has helped 'smooth' our spending month-over-month and she sees the value in that. 4. it's liberating for the saver to simply write off that money as a loss and not have to worry/care/interrogate how and when its spent. And the spender, while she may want more 'fun' dollars (always!), she greatly appreciates the freedom from any sort of scrutiny whatsoever. YMMV but it's worked for us for nigh on a decade.
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alfaspider
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Re: "Should couples combine finances or keep personal accounts?"

Post by alfaspider »

Doom&Gloom wrote: Wed May 31, 2023 8:56 am
alfaspider wrote: Mon May 29, 2023 7:44 pm The problem with "separate" finances is you can't truly separate them. What your spouse does with their money impacts you regardless of whether it's kept in a separate account or not.
It does and it doesn't.

Without separate finances and accounts we would have been divorced years ago. Had our finances been combined, free-spending DW would have spent all that she could access to zero or beyond. I would have been exceedingly stressed as that happened. Something would have had to give. We are certainly not typical of most here (or anywhere else probably) in that DW's retirement is heavily anchored by a pension that includes a COLA; mine is based upon IRAs. Having separate finances has worked extremely well for us for years.

However, we have recently confirmed what I have suspected for a long time: our emergency fund is ultimately what my emergency fund is as she has no savings at all. In prior years when we had to fund an emergency, I dug into mine and DW refunded me her share of those expenses as she could. Not ideal, but it worked. We have recently hit an emergency that she will likely not have the ability to chip in her share. I don't mind that for this particular emergency, and it has always been a possibility that I was aware of so it is easy to accept.

Neither of us have any regrets about having had separate finances. In fact, when DW's best friend was getting remarried several years ago, DW advised her to seriously consider having separate finances.
I think what you have is effectively just a spending rule. She can't spend more than her pension deposits into her account, and the separate account enforces the rule. But her spending impacts your finances since you are forced to front the emergency account and otherwise save enough to provide financial security for the both of you.
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LilyFleur
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Re: "Should couples combine finances or keep personal accounts?"

Post by LilyFleur »

Angel of Empire wrote: Wed May 31, 2023 6:05 am We combined before we were married. We are a team.

I'll bet the divorce rate is much higher for couples that tried to keep things separate.
Not necessarily. I was married to someone for many decades who was extremely controlling about money. Finances were combined, but it was a dictatorship, not a team.

I am happy for the folks who are in good marriages and work together as a team.

As for me, I'm single and happier than I was. After suffering through a multi-year, highly litigious divorce, I'm perfectly happy to be single with a high credit rating and the ability to spend/save my money as I decide.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Broken Man 1999 »

climber2020 wrote: Wed May 31, 2023 9:12 am Every situation is different; discuss with your significant other and decide which approach is best for you.

Anyone with strong opinions one way or the other making blanket statements they feel should apply to everyone is a bigot.
Yep!

DW and I have separate accounts. I hated having a joint checking account.  

In retirement, with no mortgage or auto loan, we have divided up the bills and have no need to worry about the balance of a checking account where two people are involved, as we have no joint checking account. Hoo Ray! The bills are skewed towards me by design, and both of us have plenty of discretionary spending. No idea what DW spends. Our cell phones work, our pantry and refrigerators are stuffed, and there is gas in the van. Life is good.

DW and I have no joint credit cards, she established credit way back in the 70ties. It is amazing the differences in the generations, especially in the household expenses handling. My mother never worked outside the home so far as I know. She had no money of her own, not unusual at the time, though she handled the household finances via a joint checking account. Our daughters were established in their careers before marriage, I'm sure they have money of their own for discretionary spending.

In November DW and I will celebrate our 52nd wedding anniversary. We have raised three daughters, and I believe they are stronger and more self-confident from observing her.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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Doom&Gloom
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Re: "Should couples combine finances or keep personal accounts?"

Post by Doom&Gloom »

alfaspider wrote: Wed May 31, 2023 10:06 am
Doom&Gloom wrote: Wed May 31, 2023 8:56 am
alfaspider wrote: Mon May 29, 2023 7:44 pm The problem with "separate" finances is you can't truly separate them. What your spouse does with their money impacts you regardless of whether it's kept in a separate account or not.
It does and it doesn't.

Without separate finances and accounts we would have been divorced years ago. Had our finances been combined, free-spending DW would have spent all that she could access to zero or beyond. I would have been exceedingly stressed as that happened. Something would have had to give. We are certainly not typical of most here (or anywhere else probably) in that DW's retirement is heavily anchored by a pension that includes a COLA; mine is based upon IRAs. Having separate finances has worked extremely well for us for years.

However, we have recently confirmed what I have suspected for a long time: our emergency fund is ultimately what my emergency fund is as she has no savings at all. In prior years when we had to fund an emergency, I dug into mine and DW refunded me her share of those expenses as she could. Not ideal, but it worked. We have recently hit an emergency that she will likely not have the ability to chip in her share. I don't mind that for this particular emergency, and it has always been a possibility that I was aware of so it is easy to accept.

Neither of us have any regrets about having had separate finances. In fact, when DW's best friend was getting remarried several years ago, DW advised her to seriously consider having separate finances.
I think what you have is effectively just a spending rule. She can't spend more than her pension deposits into her account, and the separate account enforces the rule. But her spending impacts your finances since you are forced to front the emergency account and otherwise save enough to provide financial security for the both of you.
That is almost what I said in my first sentence.

Label it as you wish. We each commit an agreed upon amount toward common bills. Then we are each free to do what we wish with the rest without throwing it into a common pot or seeking the other's consent or fearing their disapproval, If it is viewed as simply a spending rule, we both see the absence of personal friction and the cost of enforcement as well worth the price.

It works for us, and we've both been happy with it. I wouldn't expect it to be optimal for everyone.
Glockenspiel
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Re: "Should couples combine finances or keep personal accounts?"

Post by Glockenspiel »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
This is what I do in this scenario: Open a joint account, transfer all your money to it, change direct deposits to go to that account, and start paying all the bills from that account.
WhiteMaxima
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Re: "Should couples combine finances or keep personal accounts?"

Post by WhiteMaxima »

We keep finance in both separate and combined account. For daily expense (mortgage, utility, etc), we use joint account. For hobby expense , fun and travel expense, we use separate account. For investing, of course separate account.
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yatesd
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Re: "Should couples combine finances or keep personal accounts?"

Post by yatesd »

Angel of Empire wrote: Wed May 31, 2023 6:05 am We combined before we were married. We are a team.

I'll bet the divorce rate is much higher for couples that tried to keep things separate.
That’s essentially what the article states. Science and statistics favor a certain approach for superior outcomes.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Broken Man 1999 »

Jags4186 wrote: Wed May 31, 2023 8:25 am For married couples, unless some oddity is there like 1 person having extreme wealth prior to marriage or this being a second marriage with children from another, I don’t understand not having joined accounts.

I’m unsure how having separate accounts helps if one is a spender and one is saver. What happens when the saver asks the spender for money that they spent on whatever? If the saver is giving the spender an allowance I don’t think that is a healthy situation either.

Obviously though, Taylor and his wife have managed to make it work for 62 years…so what do I know.
DW is a bit of a spender, in comparison to me. However, she has healthy retirement accounts that support her spending, so no worries.

No allowance, her spending for her share of the bills and her discretionary spending is strictly from her own money, from her SS benefits and her TIRA account. I structured her share of the bills such that they are modest. I am willing to carry the heavier load because of the sacrifice she made as a SAHM. We both desired her being a SAHM, but the nine year absence from the work force knocked her career in the dirt.

She is happy, I am happy, life is very good.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
KRP
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Re: "Should couples combine finances or keep personal accounts?"

Post by KRP »

Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
As others mentioned, is the OP asking about separate accounts (IRAs alone make that unavoidable) or separate finances?
ttboy
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Re: "Should couples combine finances or keep personal accounts?"

Post by ttboy »

Separate accounts from the beginning for same reason as Mr. Larimore stated. It has worked well and possibly saved our marriage.
DIYtrixie
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Re: "Should couples combine finances or keep personal accounts?"

Post by DIYtrixie »

Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
Put us down for the “combined finances but separate accounts” team. I’m CFO; my spouse is not particularly interested in financial matters but willing to sit through brief, high-level quarterly financial reports, especially now that I’ve started including graphs. :wink: We use a joint asset allocation across all our accounts that I monitor and adjust if it gets too far out of whack. We trust each other and respect each others’ opinion; we’re also both pretty frugal and deliberate with our spending. For these reasons, it is unfathomable that one of us would make a major purchase without discussing it (likely ad nauseam) with the other, regardless of where the money is coming from.

So how did we wind up with separate accounts? We didn’t meet until our mid 30s, at which point we were both homeowners (each with our mortgage as our only debt). We each have family baggage that occasionally has financial implications, which we each want to handle on our own.

That’s how we *started* with separate accounts, at any rate. We’ve stuck with them because it works really, really well for us and neither sees any benefits to changing the status quo (other than housing: when we married we bought our current house, titled in both our names). We each pay certain regular household bills and we alternate mortgage and property tax payments. Beyond that, we don’t really keep track: as the planner in the family, I tend to spend more on stuff planned and paid for in advance, like plane tickets, whereas my spouse tends to pay for more of the stuff that’s paid for in person, like hotels and restaurant meals. We have our own credit cards, each of which is paid off in full each month.

When we first got married nearly 20 years ago, our expenses were a larger fraction of our salaries, so we watched somewhat closely how evenly things worked out. Now our salaries have gone up and our expenses down to a point where we don’t keep track at all anymore.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

rob wrote: Mon May 29, 2023 10:34 pm
Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
It's combined whether or not you like it... There MIGHT be exceptions for pre-marital assets that are never mixed depending on state and a stack of other things.... but it's all up for grabs in a contentious divorce, so pretending otherwise is not a great plan (short of an iron clad prenup and I'm not sure there is such thing).
That's not really true. Retirement accounts have individual names on them, and I believe there are various rules for how those assets are split (if at all) in a divorce. Pensions also have various rules and restrictions on who they "belong" to.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
You combine everything ! (except a company that she owns....)
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rob
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Re: "Should couples combine finances or keep personal accounts?"

Post by rob »

Maverick3320 wrote: Wed May 31, 2023 11:03 pm
rob wrote: Mon May 29, 2023 10:34 pm
Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
It's combined whether or not you like it... There MIGHT be exceptions for pre-marital assets that are never mixed depending on state and a stack of other things.... but it's all up for grabs in a contentious divorce, so pretending otherwise is not a great plan (short of an iron clad prenup and I'm not sure there is such thing).
That's not really true. Retirement accounts have individual names on them, and I believe there are various rules for how those assets are split (if at all) in a divorce. Pensions also have various rules and restrictions on who they "belong" to.
Think thru a crazy scenario.. One spouse has 50x in a retirement account than the other with no other assets. You think that is not getting affected in a divorce? QDRO's exist for a reason... Sure there are exceptions but as a general ROT, I don't see how its false.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
Just like anything else in marriage - communication and compromise.

My wife and I make roughly the same salary. After she gave birth, she went down to 80% so she could have Wednesdays to rest/recuperate/ attend kiddo appointments, etc - so instead of both putting $2500/month into our joint account, we talked about it and agreed on a new number: I put in $3000 and she put in $2000. I think it was a five minute conversation.
JayhawkGolfer
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayhawkGolfer »

GF and I have different methods of tracking. I keep a spreadsheet and log purchases and balances daily. She keeps paper receipts and ticks them off against paper statements every month. We could not function in the others world.
Saving$
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Re: "Should couples combine finances or keep personal accounts?"

Post by Saving$ »

22twain wrote: Mon May 29, 2023 11:09 pm
bluebolt wrote: Mon May 29, 2023 9:52 pm Most of our accounts are separate as we married when we were independently living already.
Same here. We married in our mid/late 30s (now late 60s / mid 70s). We continued to have paychecks (approximately equal salaries) deposited to our individual checking accounts. We set up a joint checking account for household expenses (groceries, mortgage, utilities, repairs, etc.). We contribute equal amounts to it, taking turns every few months.

We have a joint credit card that we pay from the joint checking account. We use it for household expenses that don't get paid directly from the joint checking account, and for travel/restaurants/entertainment together.

Personal expenses (hobbies, clothes, solo travel, etc.) come out of our personal accounts. Neither of us is a big spender. I spend more on hobby stuff, including travel to hobby events, but it's not expensive stuff like boats or classic cars. We're on the same page as far as general lifestyle level is concerned.
separate accounts does not necessarily equal obscuring one's financial picture from the other.
Exactly. We both know where to find the other's account statements. About once a year I give her a summary of the balances in all my accounts, and look up the balances on her statements so we have an idea of the grand total.

[added] This is the only marriage for both of us (35th anniversary coming up next week), and there are no kids in the picture. Also, neither of us had any debt when we married.
This is the way, with the caveat that you don't need to take turns every few months contributing to the joint account - you can set up an automatic monthly transfers from each individual account into the joint. The beauty of this system is that each can contribute the same amount to the joint account, or it can be done on a percentage basis if there is some big income discrepancy. Once them money is there, the expenses paid out of the account will automatically be allocated by the formula you have set for contributing to the joint account (ie 50/50, or 60/40 or whatever).
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Re: "Should couples combine finances or keep personal accounts?"

Post by sailaway »

DIYtrixie wrote: Wed May 31, 2023 9:06 pm
Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
Put us down for the “combined finances but separate accounts” team. I’m CFO; my spouse is not particularly interested in financial matters but willing to sit through brief, high-level quarterly financial reports, especially now that I’ve started including graphs. :wink: We use a joint asset allocation across all our accounts that I monitor and adjust if it gets too far out of whack. We trust each other and respect each others’ opinion; we’re also both pretty frugal and deliberate with our spending. For these reasons, it is unfathomable that one of us would make a major purchase without discussing it (likely ad nauseam) with the other, regardless of where the money is coming from.

So how did we wind up with separate accounts? We didn’t meet until our mid 30s, at which point we were both homeowners (each with our mortgage as our only debt). We each have family baggage that occasionally has financial implications, which we each want to handle on our own.

That’s how we *started* with separate accounts, at any rate. We’ve stuck with them because it works really, really well for us and neither sees any benefits to changing the status quo (other than housing: when we married we bought our current house, titled in both our names). We each pay certain regular household bills and we alternate mortgage and property tax payments. Beyond that, we don’t really keep track: as the planner in the family, I tend to spend more on stuff planned and paid for in advance, like plane tickets, whereas my spouse tends to pay for more of the stuff that’s paid for in person, like hotels and restaurant meals. We have our own credit cards, each of which is paid off in full each month.

When we first got married nearly 20 years ago, our expenses were a larger fraction of our salaries, so we watched somewhat closely how evenly things worked out. Now our salaries have gone up and our expenses down to a point where we don’t keep track at all anymore.
DH first made me an authorized user on a cc when logistics changed and it made sense for me to do the grocery shopping instead of him or us. We finally opened a joint account when he developed a chronic condition that affects executive function and was finding bill paying overwhelming.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

Maverick3320 wrote: Wed May 31, 2023 11:18 pm
Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
You combine everything ! (except a company that she owns....)
Huh?
Being wrong compounds forever.
randomguy
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Re: "Should couples combine finances or keep personal accounts?"

Post by randomguy »

Wanderingwheelz wrote: Thu Jun 01, 2023 6:58 am
Maverick3320 wrote: Wed May 31, 2023 11:18 pm
Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
You combine everything ! (except a company that she owns....)
Huh?
The implication is that could be a big but. You exclude it because you didn't contribute much. So should you also exclude the assets gained from your salary growth cause she didn't contribute much? And so on down the line.

In the end we all pick out what seems "fair" and workable to us. A bunch of 25 year olds in the same field with the same net worth might have different ideas than a bunch of 50 years olds with networks 10x different and incomes that off 3x. Something might work better for 75% of the people but that doesn't help you if you are in the 25% where it doesn't work. You have to figure out who you and your spouse are.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

randomguy wrote: Thu Jun 01, 2023 7:12 am
Wanderingwheelz wrote: Thu Jun 01, 2023 6:58 am
Maverick3320 wrote: Wed May 31, 2023 11:18 pm
Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
You combine everything ! (except a company that she owns....)
Huh?
The implication is that could be a big but. You exclude it because you didn't contribute much. So should you also exclude the assets gained from your salary growth cause she didn't contribute much? And so on down the line.

In the end we all pick out what seems "fair" and workable to us. A bunch of 25 year olds in the same field with the same net worth might have different ideas than a bunch of 50 years olds with networks 10x different and incomes that off 3x. Something might work better for 75% of the people but that doesn't help you if you are in the 25% where it doesn't work. You have to figure out who you and your spouse are.
Anyone is free to have their own view on how to separate things with or from their spouse.

Maybe it’s a big “but”? It could be in someone else’s marriage, but not mine. For me (Notice I said me and not that this should be someone else’s view) it makes a difference that she’ll inherit nothing some day and I’ll inherit millions- assuming we’ve gone our separate ways. So if there’s some weird thing going on that I’m completely unaware of and she tells me to have a nice life, I’m perfectly fine with splitting things down the middle and her keeping 100% of the company she came to me with and she ain’t gonna know nothin about the @ $5MM coming my way at some point.

I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together). If she took my advice on how to run her biz it would probably be worth half of what it is. Lmao She owns a high end woman’s shop and I don’t know very much about $600 sweaters and $2000 necklaces, and I’ve never encouraged her to teach me.

I’m probably the only Boglehead who’s wife started a successful company at age 24, before we knew one another that’s still doing great decades later. I’d that complicated? Maybe it is to some here, but it’s not to me. That said I can see why it might be to someone- someone who perhaps has dollar signs in his eyes. I’ve been retired “early” a couple of years and she actually encouraged me to do so that the two of us will have more time to spend together- and she’s 100% fine with me spending any of the money her company profits provide us. I married an Angel- the closest thing I’ve ever come across the perfection. My daughter would go to the ends of the earth for her and I know my wife would do the same for her and that’s what’s most important for me- not money, not anything.

Hope that clears things up at least some. Everything but the business.
Being wrong compounds forever.
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Re: "Should couples combine finances or keep personal accounts?"

Post by randomguy »

Wanderingwheelz wrote: Thu Jun 01, 2023 7:32 am
randomguy wrote: Thu Jun 01, 2023 7:12 am
Wanderingwheelz wrote: Thu Jun 01, 2023 6:58 am
Maverick3320 wrote: Wed May 31, 2023 11:18 pm
Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
You combine everything ! (except a company that she owns....)
Huh?
The implication is that could be a big but. You exclude it because you didn't contribute much. So should you also exclude the assets gained from your salary growth cause she didn't contribute much? And so on down the line.

In the end we all pick out what seems "fair" and workable to us. A bunch of 25 year olds in the same field with the same net worth might have different ideas than a bunch of 50 years olds with networks 10x different and incomes that off 3x. Something might work better for 75% of the people but that doesn't help you if you are in the 25% where it doesn't work. You have to figure out who you and your spouse are.
Anyone is free to have their own view on how to separate things with or from their spouse.

Maybe it’s a big “but”? It could be in someone else’s marriage, but not mine. For me (Notice I said me and not that this should be someone else’s view) it makes a difference that she’ll inherit nothing some day and I’ll inherit millions- assuming we’ve gone our separate ways. So if there’s some weird thing going on that I’m completely unaware of and she tells me to have a nice life, I’m perfectly fine with splitting things down the middle and her keeping 100% of the company she came to me with and she ain’t gonna know nothin about the @ $5MM coming my way at some point.

I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together). If she took my advice on how to run her biz it would probably be worth half of what it is. Lmao She owns a high end woman’s shop and I don’t know very much about $600 sweaters and $2000 necklaces, and I’ve never encouraged her to teach me.

I’m probably the only Boglehead who’s wife started a successful company at age 24, before we knew one another that’s still doing great decades later. I’d that complicated? Maybe it is to some here, but it’s not to me. That said I can see why it might be to someone- someone who perhaps has dollar signs in his eyes. I’ve been retired “early” a couple of years and she actually encouraged me to do so that the two of us will have more time to spend together- and she’s 100% fine with me spending any of the money her company profits provide us. I married an Angel- the closest thing I’ve ever come across the perfection. Damn I’m lucky!
And how much does she know about your career? By using the same logic shouldn't you be excluding all of that growth as a resulted during the marriage just like you excluded the growth of her business? And if you get your 5m tomorrow (you hope not), would you commingle it up or are you going to keep it separate? Again it is up to you to figure out what you both consider fair and what makes you happy. But saying everything is combined except for the things that might be 50%+ of your net worth seems like a notable exception.

You will hear the repeated stat of money being one of the main reasons people break up. The question is always why money is the issue and if any of these schemes help. The stress is normally a combo of different values (spending versus savings), partner trying to control the other (I make the money, I get to pick how it is spent), or the variations of income leading to stresses (we split expenses but I can't afford the lifestyle they want). Depending on what the issue is any of these schemes can add or remove stress.
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Re: "Should couples combine finances or keep personal accounts?"

Post by investnoob »

I am guessing that I would have a tough time "combining finances" with someone in my 40s/50s (put that in quotes because it seems to mean different things to different people).
I believe its probably pretty easy to do if you are in your 20s with minimal assets.

If I were to get a spouse after I retire, they don't even qualify for the spousal benefit of my pension (lifetime monthly payment). I think they only qualify for the survivor benefit (lump sum of returned contributions).

Seems like the way I'd go about this is just creating one joint account to spend joint expenses from together.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

randomguy wrote: Thu Jun 01, 2023 8:00 am
Wanderingwheelz wrote: Thu Jun 01, 2023 7:32 am
randomguy wrote: Thu Jun 01, 2023 7:12 am
Wanderingwheelz wrote: Thu Jun 01, 2023 6:58 am
Maverick3320 wrote: Wed May 31, 2023 11:18 pm

You combine everything ! (except a company that she owns....)
Huh?
The implication is that could be a big but. You exclude it because you didn't contribute much. So should you also exclude the assets gained from your salary growth cause she didn't contribute much? And so on down the line.

In the end we all pick out what seems "fair" and workable to us. A bunch of 25 year olds in the same field with the same net worth might have different ideas than a bunch of 50 years olds with networks 10x different and incomes that off 3x. Something might work better for 75% of the people but that doesn't help you if you are in the 25% where it doesn't work. You have to figure out who you and your spouse are.
Anyone is free to have their own view on how to separate things with or from their spouse.

Maybe it’s a big “but”? It could be in someone else’s marriage, but not mine. For me (Notice I said me and not that this should be someone else’s view) it makes a difference that she’ll inherit nothing some day and I’ll inherit millions- assuming we’ve gone our separate ways. So if there’s some weird thing going on that I’m completely unaware of and she tells me to have a nice life, I’m perfectly fine with splitting things down the middle and her keeping 100% of the company she came to me with and she ain’t gonna know nothin about the @ $5MM coming my way at some point.

I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together). If she took my advice on how to run her biz it would probably be worth half of what it is. Lmao She owns a high end woman’s shop and I don’t know very much about $600 sweaters and $2000 necklaces, and I’ve never encouraged her to teach me.

I’m probably the only Boglehead who’s wife started a successful company at age 24, before we knew one another that’s still doing great decades later. I’d that complicated? Maybe it is to some here, but it’s not to me. That said I can see why it might be to someone- someone who perhaps has dollar signs in his eyes. I’ve been retired “early” a couple of years and she actually encouraged me to do so that the two of us will have more time to spend together- and she’s 100% fine with me spending any of the money her company profits provide us. I married an Angel- the closest thing I’ve ever come across the perfection. Damn I’m lucky!
And how much does she know about your career? By using the same logic shouldn't you be excluding all of that growth as a resulted during the marriage just like you excluded the growth of her business? And if you get your 5m tomorrow (you hope not), would you commingle it up or are you going to keep it separate? Again it is up to you to figure out what you both consider fair and what makes you happy. But saying everything is combined except for the things that might be 50%+ of your net worth seems like a notable exception.

You will hear the repeated stat of money being one of the main reasons people break up. The question is always why money is the issue and if any of these schemes help. The stress is normally a combo of different values (spending versus savings), partner trying to control the other (I make the money, I get to pick how it is spent), or the variations of income leading to stresses (we split expenses but I can't afford the lifestyle they want). Depending on what the issue is any of these schemes can add or remove stress.
As I mentioned in my previous comment- I disposed of my business already and I guess I’m retired even thought I have no pension and don’t draw from savings. I’m probably more of a trophy husband tbh.

She and I have talked about my parents money and she doesn’t seem to care much whether or not the funds got commingled. My dad and I have talked about it and thought it would be his preference that I didn’t commingle, he understands we’ve been married a long time, she’s always out earned me and she’s raised my daughter as her won since she was 5.

The business has never been appraised, but excluding tangible assets owned by the company I’d be surprised if it’s 5% of our net worth- the assets might be worth another 5% on a good day in the fattest part of the year (which are what is 100% in her control). The company owns no real estate. When we did our trust work she chose to leave it out of trust which I’m not sure was such a great idea- but again, I stay out of it. My biggest concern would be her employees (one of whom is highly compensated but could easily find another job), not me. We’d be just fine without it since we’re completely finically independent at 48/52, what some people call fat FIRE if she was to retire too. It’s actually her wish to be done with it by the end of her current lease term, but I have my doubts. It generated over $500,000 in income last year. That’s enough to make a reasonable person think about keeping it a bit longer.

Anyway… like I said previously, it’s her business and I stay out of it. Hope that helped! Oh.. and if anyone knows someone who wants to buy a really successful business send me a message.
Being wrong compounds forever.
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